The Quayside West development at Forth Yards will be built on the “last major brownfield” site in the city, near the central rail station.

The government has approved the business case for the package, developed by Homes England.

This has seen it work with the North East Mayor and Combined Authority, Newcastle City Council and Network Rail.

The funding will be used on groundworks and infrastructure for the site to fix “complex land issues” that have so far stopped development.

Homes England acquired the Quayside West land, which has capacity for 1,100 homes, in 2024.

Elsewhere, Network Rail Property is bringing forward plans for 600 homes on the site, as part of its Platform4 initiative to deliver housebuilding on its land.

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“This government has a brownfield first approach to development, and we want to see previously used land prioritised wherever possible,” said Matthew Pennycook, housing and planning minister.

“We are acting to make it easier to build homes on abandoned, disused and neglected urban brownfield sites across the country — boosting housing supply, regenerating communities, and delivering economic growth.”

Robin Dobson, group property director at Network Rail, added: “As Network Rail Property bring forward planning submission for the first phase of Forth Yards with up to 600 homes this year, we welcome this financial commitment to unlock the wider Forth Yards estate delivering a further 2,500 homes.

“Forth Goods Yard has been landlocked for decades and the combined efforts of Network Rail Property, Homes England and the Newcastle City Council will enable the transformation of this strategically important site for generations to come.”